How to Prevent Child Identity Theft

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One day in early 2011, Simon Umscheid got a call from a woman asking to speak to Mr. Ian Umscheid — a strange way, he thought, for someone to refer to his 6-year-old.

"When I told her he was unavailable, she got sort of nasty and said, 'I need to talk to him. He has a very large balance on his credit card that he needs to take care of,'" Umscheid recalls. "So I said, 'After he gets home from school and makes his bed, I'll let him know.'" The woman’s stunned silence said it all: She'd had no idea Ian was a child — and a victim of identity theft.

It turned out thieves had used his name and social security number (SSN) to go on a spending spree, and now the bills were coming due. "There were six or seven accounts owing somewhere between $15,000 and $20,000," says the dad of two. Included in the haul: $4,500 to a local jewelry store, over $3,000 in bank loans, and more than $5,000 on a credit card. Ironically, this was far from the first time Umscheid had seen this sort of thing happen: As a supervising deputy district attorney for San Bernardino County in California, he deals with these types of criminal cases regularly.

"I'm extremely careful with my family's information," he says. "If it can happen to us, it can happen to anyone."

Fact is, kids are more likely to have their identities stolen than adults — and to suffer more serious consequences. When Carnegie Mellon researchers followed up on about 350,000 cases involving a breach of personal information, they discovered that kids' SSNs were 51 times more likely to be used to open fraudulent accounts. That number is on the rise: Another 2012 study found that identity theft among children younger than 5-years-old had more than doubled from the previous year.

Why are kids such easy pickings? Nobody thinks to watch out for them in this way. "Often, child identity theft isn’t detected until a kid is a teenager, and by then, the damage is done," says Robert P. Chappell, Jr., a Hampton, VA, police captain and author of Child Identity Theft. Adds Umscheid: "Adults use their credit all the time, so you or I are likely to notice red flags, like being turned down for a loan. But who checks up on a 6-year-old’s credit?"

Even scarier, child identity theft goes beyond credit card fraud. Yes, unsavory folks want to get their hands on your child’s social security number, but they’ll settle for his name and address, too — and that info lets them give the cops a false name if they get arrested, get medical care without insurance, or a fake ID in order to work. The more bits of your child’s identity someone has, the more damage that person can do.

For example, Michelle Finneran Dennedy, the privacy officer at the computer protection company McAfee, discovered that someone in Arizona had used her daughter's name and SSN to open an account with a utilities company, rack up bills in Riley’s name, and then walk away without paying them off.

With so many ways thieves can game the system, it's wise to stay one step ahead. So we talked to experts who are onto their tricks and found out exactly what you need to do to protect your family’s privacy — at home, your kid’s school, and any other place your data might be up for grabs. Operation Stop Thief starts now!

At Home:

Too many computers and tablets remain seriously vulnerable — and there are scads of viruses that can crawl into your device and search for details about your family. But old-school trash-diving is also still profitable: Simply plucking an old tax form or envelope with your kid’s name out of the garbage allows a person to start scamming. Here are some steps you can take to protect your child's identity:

Update your computer’s virus protection. One study found that if you have triple-protection software on your device — anti-virus, antiadware, and anti-spyware — you’ll block malware attacks and cut the risk of identity theft in half.

Use safe passwords. A combination of letters, numbers, and signs that aren’t keyed into public info, like your address or birthday, is best. Don’t use the same password (or variations), and change the ones you use occasionally.

Lock away important papers. Put your tax returns, health forms, and other important papers on a flashdrive, in a safe, or on an encrypted cloud-based service.

Many schools ask for your child’s social security number to help track test scores — without knowing or investing in the cyber-protection programs to keep this info safe. Some camps and even clubs may ask for SSNs, too. Question the need for a SSN. The only time you have to share your child’s info is on your taxes or when you sign up for health insurance. Otherwise, don’t hand her SSN over. “Most of the time, if you ask about it, the camp or sports league will say it’s not necessary, but you need to speak up,” says Chappell. Federal laws now make it easier for you to opt out of data-gathering by schools or other programs. Don’t worry, your child won’t be penalized.

In the World:

One reason child identity theft numbers are rising is that hackers target large databases — like your workplace or health insurance company — and snatch private information in increasingly sophisticated ways. The Umscheids, for instance, received a letter from their health care provider saying a hard drive had gone missing that contained Ian’s name, birthdate, address, and social security number, among other details — along with those of thousands of others. Use these steps to help protect your kid's identity:

Opt out of marketing lists if you open a bank account for your child. The more times a child’s information changes hands, the higher the risk of someone stealing it.

Get a one-time check from an outside company, suggests Dennedy, who created Theidentityproject.com, a victim-education site, after her family’s identity-theft experience. AllClear ID, for instance, offers a free one-time scan for minors that includes not just the credit bureaus, but arrest records.

Ask for a special child scan from credit bureaus like Equifax, which is better than a regular credit scan (the kind you’d ask for yourself) for kids. Here’s why: A regular scan just looks for the exact match of a name, address, and social security number. If one element doesn’t sync up — which it usually won’t if the ID’s been stolen — the bureau reports that that file wasn’t found. To request the scan, send a letter along with a copy of your driver’s license, your child’s social security card, and your child’s birth certificate.

Sign up for more protection. Companies can do regular checks for a fee: AllClear ID charges about $5 a month for a child, LifeLock about $10. Equifax also has a family plan (two adults and up to four kids) for $30 a month for 24/7 monitoring and alerts.

Create a file with the credit bureaus and freeze its credit until your child is 18. This way, if someone tries to access it, you’re automatically notified.

Demand free credit repair if your employer or health insurer has suffered a data breach. Often these companies will provide it to those affected. Companies will also provide free monitoring for at least a year. If your workplace or insurance company doesn’t provide this, speak up.

Get a scan when your kid’s a teen. If you want to hold off now for whatever reason, experts advise checking up on your child’s credit no later than age 16. “I’ve seen kids who couldn’t go to college when they wanted to because a problem was discovered and they couldn’t get college loans or a scholarship,” says Chappell.

Don't Miss These Red Flags!

If you see any of these warning signs , your child’s ID could be — or is — compromised.

Lots of junk mail addressed to your kid

Credit card offers or bills in your child's name

Collection calls

The IRS tells you there's a file under your kid's SSN — and you didn't create it

Once your suspicions are confirmed, take the steps below:

Call the cops. A police report can help you head off problems later and will bolster your case with credit agencies and other organizations. Speak to whoever deals with identity crimes.

Contact the credit bureaus. Experian, Equifax, and TransUnion can get you a copy of the fraudulent credit file and help you put a freeze on it.

Bone up to the law. Regulations governing identity theft vary from state to state, but the nonprofit Identity Theft Resource Center (ID Theft Center) has an interactive map with links to helpful resources. One will probably take you to your state’s attorney’s office site, which will be the most up-to-date source for laws. It’ll also have letter templates so you can contact the right people in the correct way and with the right information.

Reach out to banks or stores. Ask for the security or fraud department, and let the person in charge know what’s happened. Request that the store or credit-card company not hold you accountable for the charges — it may choose to go after the thief or simply write off the debt. You may need to send the police report as proof.

Bring in the pros. People who’ve had their IDs stolen spend an average of 330 hours fixing their credit. But when the victim’s under 18, you have to go through extra steps to prove you’re the parent and that can take even longer. That’s why it makes sense to get help from services that specialize in this, like AllClear ID — the company that straightened out Ian Umscheid’s problem — or Identity Guard. Sure, it may cost several hundred dollars, but it’s worth it: “The company that helped with our case really knew what it was doing, and it still took about a year to clean up,” says Dennedy.